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Harkins looks at 5.7% tax increase

'We can't kick the can down the road'

John Burgeson
| on March 12, 2014

STRATFORD -- Mayor John Harkins said Wednesday that his proposed $204 million operating budget for 2014-15 would raise property taxes by 5.7 percent over what they are now and would increase spending by 6 percent.

The tax increase, significantly greater than what the mayor put on the table a year ago, is badly needed to fund ongoing pension obligations and other critical needs, such as ramped up school security, Harkins said in a wide-ranging discussion with Hearst Connecticut Media.

"Our biggest challenge was our pension debt," Harkins said. "We addressed this last year, but this was something that was never fully funded, even going back decades."

The mayor explained that if the town sticks to his plan, it will in years hence realize savings of more that $80 million over the next 25 years. But to get to that point, the town will have to shoulder significant pension fund payments for the next four fiscal years.

Town officials say that Stratford had $184 million in underfunded pension liability at the end of the 2012-13 fiscal year, and that nearly $6 million of Harkins' operating fund "is attributable to the effort to fulfill the town's underfunded pension obligations," the mayor said in his budget preamble.

"It's an expense that we're going to have to address," Harkins said. "We really don't have any choice in the matter and I'm not going to be the one who kicks the can down the road, unlike what was done in the past."

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Under the Stratford mayor's proposed budget:The mill rate rises to 36.62 from 34.64, an increase of 1.98 mills.A home with a market worth of $350,000 and assessed value of $245,000 would see taxes rise to $8,967 from $8,486, or $481.

Soon after taking office in 2009, the Harkins administration closed down the municipal pension plan; all town employees hired since then have been enrolled in a 401K plan, as with most employees in the private sector. But there are sill many employees who now collect pensions and ones who will begin to do so after they retire.

The increase in the town's pension bond obligations was by far the biggest cost driver in the mayor's proposed budget, the mayor said. Other items that pushed up his budget included a $2.3 million increase in education spending and increased costs for contracted wage increases and for greater general operating expenses. But these were minor players to the looming pension obligations, Harkins said.

"We're finally addressing these issues," Harkins said. "A lot of these things you have to ask yourself `why didn't we take care of these things before?' "

The mayor's budget, if adopted by the Town Council, would raise the mill rate from 34.64 to 36.62, an increase of 1.98 mills. In Connecticut, houses are assessed at 70 percent of their market value, meaning that a Stratford home with a market worth of $350,000 and an assessed value of $245,000 would see its taxes increase from $8,486 to $8,967, or $481.

A year ago, the mayor budget increased the mill rate by .16 mills; this sailed by the Town Council virtually unchanged, although it was an increase that wasn't lost on Democratic mayoral hopeful Joe Paul.